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CBS and Comcast Reach a 10-Year Deal on Fees

In a deal that represents hundreds of millions of dollars in new revenue for CBS, the network said Monday that it had secured subscriber fees for its local stations from Comcast for the next 10 years.

The unusually long-term agreement also lays the groundwork for Comcast subscribers to watch CBS content online through an authentication process sometimes called TV Everywhere. Rather than letting anyone watch television episodes online, media companies want to allow access only to those people who already pay for cable or satellite service.

The financial terms of the deal were not disclosed. The 10-year time span proclaims long-term confidence in the monthly subscription business model for media. In fact, CBS said it had never reached a carriage deal of this length before. Last year, the network reached a five-year deal with Time Warner Cable, the nation’s second-biggest cable provider behind Comcast. CBS is to report second-quarter earnings on Tuesday after the market closes.

The CBS chief executive, Leslie Moonves, has been vocal about demanding so-called retransmission fees from cable systems for the right to carry local television stations. Traditionally, local broadcast stations were free and cable systems paid only for cable channels. However, retransmission fees are becoming more common in the television business.

A spokeswoman for Comcast said it had been pushing for long-term deals with content providers like CBS. Notably, Comcast’s existing deal with CBS was not set to expire until the end of 2011. The deal with CBS comes as Comcast is trying to buy NBC Universal, the parent of one of CBS’s chief competitors, NBC.

Anthony DiClemente, an analyst with Barclays Capital, projected in a research report on Monday that CBS would earn about 50 cents a month per subscriber from the Comcast deal in markets where CBS owns television stations, starting in 2012 , for a total of about $75 million a year. He said the fees would probably escalate over time, eventually increasing to about $1 a month.

In part because of the retransmission demands, some negotiations between cable systems and content providers have been testy lately, as witnessed when Cablevision viewers missed the beginning of the Oscars in March because of a dispute with the Walt Disney Company. A new dispute is now brewing between Time Warner Cable and Disney.

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But the talks between CBS and Comcast never became publicly acrimonious. “I think if you have two good, forward-looking companies who value each other, you can get things done,” Mr. Moonves said.

Mr. Moonves noted that the negotiations were “probably somewhat easier” for CBS, which owns only one major cable channel, than they are for companies like Disney, which owns numerous channels.

Brian L. Roberts, the Comcast chief executive, said in a news release, “In this time of rapidly changing technology and viewership interest, we were able to structure a deal that gives customers the content they want without any threat of disrupting their service.”

Comcast will have new online and on-demand rights to Showtime series and movies. For instance, Comcast will now have video-on-demand access to CBS’s late-night shows.

“There are checks and balances so we will not hurt our product on the air, which is still our bread and butter,” Mr. Moonves said.

Mr. Moonves said the deal signified “what they’ve said in Washington,” referring to Comcast’s statements to government regulators about the proposed NBC purchase. “They do value the content, and they value the content providers,” he said.

A version of this article appears in print on August 3, 2010, on Page B5 of the New York edition with the headline: CBS and Comcast Reach A 10-Year Deal on Fees. Order Reprints|Today's Paper|Subscribe